Posted on 03/13/23
| News Source: FOX45
Governments in the U.S. and Britain are taking extraordinary steps to prevent a potential banking crisis after the failure of California-based Silicon Valley Bank prompted fears of a broader upheaval.
U.S. regulators worked through the weekend to find a buyer for the bank, which had more than $200 billion in assets and catered to tech startups, venture capital firms, and well-paid technology workers.
While those efforts appeared to have failed, officials assured all of the bank's customers that they would be able to access their money on Monday.
The assurances came as part of an expansive emergency lending program intended to prevent a wave of bank runs that would threaten the stability of the banking system and the economy as a whole.
Meanwhile, the Bank of England and U.K. Treasury said early Monday that they had facilitated the sale of the bank's London-based subsidiary to HSBC, Europe's biggest bank, ensuring the security of 6.7 billion pounds ($8.1 billion) of deposits.
Regulators in the U.S. rushed to close Silicon Valley Bank on Friday when it experienced a traditional bank run, where depositors rushed to withdraw their funds all at once. It is the second-largest bank failure in U.S. history, behind only the 2008 failure of Washington Mutual.
In a sign of how fast the financial bleeding was occurring, regulators announced that New York-based Signature Bank had also failed and was being seized on Sunday.
At more than $110 billion in assets, Signature Bank is the third-largest bank failure in U.S. history. Another beleaguered bank, First Republic Bank, announced Sunday that it had bolstered its financial health by gaining access to funding from the Fed and JPMorgan Chase.
The developments left markets jittery as trading began Monday. The Asian and European markets fell but not dramatically, and U.S. futures were down.